How to estimate solar savings yourself

Solar calculators look like black boxes. They are not. Here is the whole thing, using Virginia's statewide average price over the 12 months to July 2026 (16.48¢) and a median Virginia roof (1,389 kWh per kW per year). Swap in your own numbers.

Line 1: usage

Monthly bill ÷ rate × 12 = annual kWh. $180 ÷ $0.1648 × 12 ≈ 13,107 kWh a year. If you have twelve bills, just add the kWh instead.

Line 2: system size

Annual kWh ÷ production per kW = system size. 13,107 ÷ 1,389 ≈ 9.4 kW. For an east/west or partly shaded roof, first reduce the production figure (multiply it by 0.85 for east/west, 0.9 for some shade: why), which makes the system that covers the same usage bigger, not smaller.

Line 3: cost

Size × 1,000 × $/W. 9.4 × 1,000 × $2.75 ≈ $25,850. Subtract any incentive; the federal residential credit is 0% for homeowner-owned systems installed after 2025, so nothing to subtract. (This is not tax advice. Confirm your own situation with a tax professional.)

Line 4: first-year savings

Production × the energy rate, plus SRECs. The all-in rate includes the fixed customer charge, which solar cannot avoid, so take it out first: $0.1648 − ($15 × 12 ÷ 13,107 kWh) ≈ $0.1511 per kWh. Then 13,057 kWh × $0.1511 ≈ $1,973, plus about $390 in SRECs = $2,362 in year one. Under one-for-one net metering, every kWh produced is a kWh not bought, up to your annual usage.

Line 5: simple payback

Cost ÷ first-year savings. $25,850 ÷ $2,362 ≈ 10.9 years. That is the number most people quote, and it is slightly pessimistic, because it ignores rising rates, and slightly optimistic, because it ignores panel degradation.

The honest version: year by year

To do it properly, repeat line 4 for each of 25 years with the rate growing and production shrinking:

• Energy rate in year n = energy rate × (1 + escalation)ⁿ⁻¹ (fixed charges stay flat)
• Production in year n = year-1 production × (1 − 0.5%)ⁿ⁻¹
• Savings in year n = production × energy rate (capped at usage × energy rate) + SRECs

Add the savings up; the year the running total passes the cost is the break-even. With 3% escalation the example breaks even in 10.1 years with $45,023 net benefit over 25 years (nominal dollars, not discounted). With rates frozen at today's level: 11.6 years and $24,242. That gap is the rate-increase slider in the calculator, and it is the single most important judgment call in the whole exercise.